ASX shares that can consistently deliver both growth and income are a rare breed.
Normally, income investors don’t dabble with growth plays like Afterpay Touch Group Ltd (ASX: APT) or Zip Co Ltd (ASX: Z1P). This is because they pay no dividends (or profits…) and are more speculative in nature.
Growth investors conversely are loath to bother with high-yielding dividend stocks like Westpac Banking Corp (ASX: WBC), as these stocks tend to focus on maximising dividend yields over investing cash flow into expanding their business.
But here are 2 ASX shares that I think are poised to deliver market-beating capital growth as well as a rising dividend payout.
CSL Limited (ASX: CSL)
CSL is a former hot growth stock that has been so successful it is now a well-entrenched blue chip and the third-largest company on the ASX. Still, this healthcare giant continues to knock its numbers out of the park – reporting revenue growth of 11% and profit growth of 17% in its FY19 results in August.
But CSL has also been quietly growing its dividend payouts every year too. Since it first started to write dividend cheques back in 2013, CSL has bumped its yield by approximately 20% per year – growing its annual dividend from US$1.02 per share in 2013 to $1.85 per share this year.
If this growth rate continues (and I believe it will), CSL will be a formidable income share in the not-too-distant future.
NIB Holdings Limited (ASX: NHF)
NIB has grown to become one of the largest private health insurance providers on the ASX over the last decade – only beaten by the government float of Medibank Private Ltd (ASX: MPL) in 2014.
NHF shares have risen from about $1.25 exactly 10 years ago to the $6.76 level we see today – a rise of 440%. So the capital growth gets a big tick here.
But NIB has delivered a mountain of dividend cash to its shareholders over this period too. Back in 2008, NHF shares were yielding just 5.1 cents per share, but in FY investors were rewarded with a total payout of 23 cents a share.
With the increasing burden on the public health system and continuing subsidies for private insurance, I think NIB is in a great long-term tailwind and will continue to give off nice growth numbers as well as fat dividends well into the future.
With these two ASX stocks, you have fantastic investments for both growth and income today, in my opinion. Of the two, CSL shares are perpetually expensive, but I think will continue to be one of the best ‘no-brainer’ buys out there.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, CSL Ltd., and ZIPCOLTD FPO. The Motley Fool Australia has recommended NIB Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.